Debevoise & Plimpton news, updates and analysis | Page 1 of 3

Property tycoon Robert Tchenguiz has replaced longstanding legal adviser Stephenson Harwood with Debevoise & Plimpton after his €2bn claim against an Abu Dhabi investment company was thrown out.

A Debevoise team, led by disputes partner Kevin Lloyd, took over future Tchenguiz mandates, including a key Commercial Court case later this year. Tchenguiz had only drafted in Stephenson Harwood in 2014 to replace Shearman & Sterling in his later-settled case against the Serious Fraud Office (SFO).

The latest switch follows a recent dispute between Tchenguiz’s Luxembourg-based special purpose vehicle Edgeworth Capital and Aabar, an Abu Dhabi investment company. Edgeworth and Aabar had entered into a failed joint venture to buy a €3bn, 400-acre site outside of Madrid, home to the global headquarters of Spanish banking giant Santander.

Aabar attempted to recover around €113m from Edgeworth as a result of the failed investment, but the Tchenguiz-owned company then sued Aabar for €2bn, alleging it was not entitled to make the demand. Justice Popplewell threw out Tchenguiz’s claim last week (29 June), finding ‘it was clear from Mr Tchenguiz’s evidence that he had no genuine recollection of agreeing the terms alleged.’

Notably, Justice Popplewell criticised Tchenguiz’s oral evidence in his judgment, saying: ‘He seemed to take little care in his language or the accuracy of his evidence, often contradicting something he had said previously’. The judge said it could ‘only be categorised as lying.’

The newly-appointed Debevoise team will have little time to prepare as Tchenguiz gears up for a further three-month Commercial Court trial on 1 October. Tchenguiz is pursuing two Grant Thornton partners and Icelandic lawyer Jóhannes Jóhannsson, alleging they misled the SFO into conducting dawn raids on his and his brother Vincent’s properties in 2012. The Tchenguiz brothers reached a £4.5m out-of-court settlement with the SFO in 2014.

The Grant Thornton partners will be represented by Simmons & Simmons, while Jóhannsson will be advised by Travers Smith.

Fellow US firm Reed Smith has finally returned to growth after two consecutive years of decline, increasing its top line 4% to $1.12bn in 2017. The firm’s London outpost had a particularly strong comeback, growing revenues 14% in sterling terms to £147m.

Weil’s firm-wide revenues rose 10% to $1.39bn, while PEP grew 18% to $3.64m and revenue per lawyer grew 6% to $1.24m, despite an increase in lawyer headcount and the number of equity partners.

The firm’s City arm office generated $165.4m (£128m) in revenue last year – a near 33% increase – based on the average sterling exchange rate for 2017.

A buoyant market for US restructuring work with an international element has bolstered London revenues while the firm’s leveraged finance, structured finance and private equity practices continue to grow.

Key matters for the year include advising Westinghouse Electric Company, a subsidiary of Toshiba Corp, on its $9.8bn Chapter 11 proceedings, together with the firm’s US and European offices and advising offshore drilling provider Paragon Offshore on its parallel Chapter 11 and English administration proceedings.

Other major deals for Weil include advising Oaktree Capital on the global sale of Fitness First, as well as OMERS Infrastructure on the increase of its interest in Thames Water, AMP Capital on the acquisition of the Regard Group and mandates for Antin Infrastructure.

Other key developments in London include the hire of corporate partner James MacArthur from Herbert Smith Freehills in May 2016, the addition of real estate and infrastructure finance partner Paul Hibbert from Baker McKenzie in April 2017 and real estate investment partner Anthea Bamford from Berwin Leighton Paisner in November 2017.

Meanwhile, Debevoise’s firm-wide revenue for the year was $822m, up from $735m in 2016, a 12% increase. London saw revenue rise 5% to $112.7m from $107m the previous year. PEP rose 17% to $2.8m from $2.4m.

Key litigation matters in London include advising Rolls-Royce on its Deferred Prosecution Agreement with the UK’s Serious Fraud Office.

Significantly, Reed Smith’s PEP grew 6% to $1.177m amid an expansive year marked by 55 lateral hires worldwide, the addition of a 50-strong European team from the collapse of KWM Europe and a new office in Miami.

Revenue per lawyer grew 3% to $722,000 as the firm increased its lawyer headcount overall by 1% to 1,550 including 680 partners.

Thomas added that life sciences and healthcare had a particularly strong year alongside energy and natural resources. The five sectors in which the firm is committed to being ‘industry leader’ also include financial industries, entertainment and media, and shipping and transportation.

The firm handled the US and EU competition clearance for Hong Kong shipping firm OOCL in its $6.3bn acquisition by China’s COSCO Shipping, which Thomas described as a ‘great example of sector expertise’, and advised Citibank on the financing of a public infrastructure project in Colombia.

Thomas pointed to London as ‘a great expression of the strategy of the firm’. ‘We have clients here organised around our five industry sectors and we are working very closely across our practices to grow our client relationships.’

Debevoise & Plimpton posted a 3% drop in global revenue to $735m as profits per partner also slumped by 8% to $2.4m. The New York-headquartered firm lost $21.2m from its top line in 2016, after growing revenue by $41.6m last year.

Profits per equity partner (PEP) at the firm fell by $215,000 to $2.41m.

The firm’s London office, headed by high-profile disputes partner Lord Peter Goldsmith QC and tax partner Richard Ward, is understood to have also registered a 3% drop in revenue to $107m, from $110.5m last year.

Debevoise presiding partner Michael Blair said: ‘2015 was a year of significant growth for the firm in London. Following that up with a steady 2016 was important to consolidate that growth, which is exactly what we have done.’

‘The year saw a number of significant events which shifted the business landscape considerably, and making sure we continued to work with our clients to react and adapt to those events was a key focus for the year,’ he added.

Other key cases were advising Rolls Royce on its deferred prosecution agreement with the UK’s Serious Fraud Office, and BAT Industries on proceedings brought against Sequana under the Insolvency Act 1986 to recover hundreds of millions of dollars alleged to have been unlawfully paid through dividends.

The firm’s London office has ten partners in corporate, six in dispute resolution and two in tax. The firm promoted two in London as part of its most recent partnership round, and four altogether in the last five years.

By way of laterals, the firm most recently hired dispute resolution partner Wendy Miles from Boies, Schiller & Flexner to join in London, and funds partner Patricia Volhard from Pöllath & Partners in both London and Frankfurt. Against these hires, last year the firm lost arbitration star Sophie Lamb, who joined Latham & Watkins in June 2016.

Michael Blair, presiding partner at Debevoise, said: ‘Our international disputes practice is one of the jewels in the Debevoise crown. It has an extraordinary win record, and our lawyers hold leadership roles with virtually every major arbitration body in the world. It is also an incredibly competitive area of the law, and so we are keen not to rest on our laurels. Bringing in Wendy means we are strengthening a strength. She is a hugely respected practitioner in this market.’

Miles QC added: ‘Debevoise has an impressive team and has been involved in market shaping arbitrations and public international law work in recent years. Its global platform and commitment to providing advocacy in the UK fit well with my own practice and recent experience.’

With broad arbitration experience, Miles QC has spent over 20 years’ representing multinationals, sovereign states and state entities in public international law matters. In June 2008, she notably advised war-torn southern Sudan at The Permanent Court of Arbitration in a case that redrew the boundaries of the oil-rich Abyei region.

Debevoise & Plimpton co-managing partner Lord Peter Goldsmith has secured a victory for Shell in the High Court as a judge barred 40,000 villagers from the Niger Delta from claims against the oil giant over decades of oil spills.

Mr Justice Fraser barred the claimants from redressing against the energy giant in the English courts, deciding Shell has no legal responsibility for its Nigerian subsidiary, the Shell Petroleum Development Company of Nigeria. The court decided the claim had no further prospect of success.

The Nigerians, represented by Leigh Day partners Daniel Leader and Martyn Day, will take the verdict to the Court of Appeal and expect it to be heard in the next six to ten months.

Leader said: ‘I am confident this will be overturned on appeal. This judgment is inconsistent with recent decisions of other European courts.’

‘It is our view that the judgment failed to consider critical evidence which shows the decisive direction and control Royal Dutch Shell exercises over its Nigerian subsidiary,’ he added.

He said that the early stage litigation asked Shell to clean up and create community projects to minimise the long term impact on the population, however damages had not been quantified.

Goldsmith (pictured) acted alongside former Debevoise partner Sophie Lamb who is now at Latham & Watkins, while Jones Day instructed Richard Hermer QC and Edward Craven of Matrix Chambers and Marie Kinsler of 2 Temple Gardens.

In January 2015, Day and Leader secured a substantial environmental settlement with Shell, then advised by Hogan Lovells, to pay £55m to an African community of 15,600 Nigerian fishermen after a three-year legal battle over two oil spills. The deal marked the first time the Anglo-Dutch energy giant was set to compensate individuals affected by oil spills in the region.

Walsh joined KWM in June 2015 alongside three others from Eversheds, in a move by the firm to rebuild its City offering after an early string of post-merger exits. He previously headed Eversheds’ international telecoms practice.

Fieldfisher head of technology Rob Shooter said: ‘James is well-known in the industry as a leader in his field and we are delighted that he’s joining us. His client base and experience spans across the firm’s three focus industries – technology, financial services and energy – and as such he is a fantastic addition to the Fieldfisher team.’

Witney has previously co-led KWM’s funds team in London, and had sat on the firm’s management board. He joins Debevoise as a consultant in order to complete his PhD this year in corporate governance issues in private equity backed companies.

Yesterday (4 January) Legal Business reported Frankfurt-based corporate partner Michiel Huizinga is expected to move to Allen & Overy, whilst in Germany DLA Piper has taken on KWM’s former head of real estate for Germany Lars Reubekeul and real estate partner Florian Biesalski.

New exits come as the firm’s European partnership confirmed yesterday (4 January) it has stopped paying 100 staff as it heads towards administration. The firm confirmed its intention to file for administration in a court filing in December 2016, and has lost almost all of its top 50 billers since it halted its recapitalisation plan late last year. The recap plan ultimately failed, and the firm is carrying more than £30m in debt.

Late last year, it was revealed China has bid for an out-of-administration purchase of certain legacy SJ Berwin offices including Dubai, Germany, Italy and Spain. It is also talking with partners to keep an outpost in London and if a deal is agreed, the acquisition will remain within a verein structure, and the business will take on a significant number of lawyers but without any of legacy SJ Berwin’s liabilities.

Usual suspects Travers Smith,Debevoise & Plimpton, and Freshfields Bruckhaus Deringer have been gifted with advisory roles on the latest heavyweight deal as Canada Pension Plan Investment (CPPIB) has agreed to buy Ascot Underwriting Holdings, the Lloyds of London insurer linked to American International Group (AIG), as part of a $1.1bn agreement.

Travers Smith advised the senior management team of Ascot with senior partner Chris Hale leading a team including tax partner Kathleen Russ.

CPPIB, Canada’s largest pension fund, was advised by a cross-border team at Debevoise including partners Alexander Cochran and Nicholas Potter and London-based David Innes and James Scoville. City tax partner Richard Ward also acted on the deal.

AIG will get about $240m in cash proceeds, reflecting the New York-based company’s 20% stake in the business and ownership of a related unit in the deal. Ascot Underwriting’s ownership has included an employee trust. The $1.1bn sum also includes a recapitalisation of an entity by the buyer.

Following the sale of Ascot, chief executive Andrew Brooks will continue to lead the business alongside the rest of the senior management team in their new partnership with CPPIB. As part of the transaction, AIG has divested its interest in Ascot but will maintain its ongoing strategic relationship with Ascot Underwriting Bermuda.

Travers Smith also announced a second high-profile deal this morning (20 September) and advised long-standing client Exponent Private Equity on the acquisition of The Racing Post, the leading media player in the horseracing and sports betting market in Britain and Ireland, for an undisclosed sum. Private equity partners Ian Shawyer and Lucie Cawood led on the deal alongside finance partner Donald Lowe, tax partners Kathleen Russ and Simon Skinner and commercial, IP & technology partner Richard Brown. The selling shareholders were advised by White & Case.

The mandate is in relation to the SFO’s ongoing criminal investigation into the company over allegations of fraud, bribery and corruption around the acquisition of substantial mineral assets.

A team led by Lord Goldsmith at Debevoise was first instructed to advise ENRC on the SFO probe in 2013 but today (8 July) in a statement ENRC said: ‘We have worked closely with Debevoise & Plimpton for a number of years in responding to inquiries from the SFO. Lord Goldsmith and his team have provided consistently excellent advice and representation.’

‘They have been highly impressive in their handling of what has become a wide-ranging and complex matter. We have benefitted hugely from their wise guidance in navigating the range of difficult criminal and civil considerations that have arisen throughout the course of this investigation. For a number of strategic reasons, ENRC and Debevoise have decided the time is right to conclude this working relationship. We will now be working with Quinn to plot a course forward.’

Signature Litigation’s Graham Huntley is leading for ENRC in a parallel case over the client’s previous adviser, Dechert, ENRC claims Dechert overcharged the business by £11m and failed to comply with its professional obligations when advising the miner on various allegations of fraud and corruption. Huntley also replaced Lord Goldsmith for that case, and has instructed Blackstone Chambers’ Lord Pannick QC and Fountain Court Chambers’ Richard Lissack QC.

Just last week the SFO won special government funding to pursue its investigation into the Kazakhstan-based miner, where the Treasury gave the cash-strapped watchdog extra funding for the probe.

On the change of instruction, Quinn declined to comment. Debevoise also declined to comment.

Lamb joins Latham as a partner in its City office in a move that will come as a blow to Debevoise. Lamb is regarded as one of the leading arbitration lawyers of her generation, and one of the few female success stories in an area of law that has long been male-dominated.

Lamb worked closely with former Attorney General for England and Wales and London co-managing partner at Debevoise, Lord Peter Goldsmith QC, during her eight years at the firm. Lamb made partner in 2010, just two years after joining the US firm. She began her career as a barrister at One Essex Court, where she worked closely with Lord Grabiner QC.

The hire comes as part of a renewed push by Latham in the European disputes space, having already built out in finance, private equity and competition. She is the firm’s strongest international arbitration hire in Europe since it hired Fernando Mantilla-Serrano from Shearman & Sterling in 2014 as its co-chair of international arbitration.

In the last few years, the firm has landed rainmaker Claudia Salomon in New York from DLA Piper where she was co-chair of its international arbitration practice, Ing Loong Yang from Sidley Austin in Hong Kong and Markus Rieder in Munich from Shearman & Sterling.

Lamb has acted as adviser and advocate in more than 100 international commercial arbitrations. She has also led complex litigation in the English and overseas courts, including in business and human rights cases, and has full rights of audience in the superior English courts, having appeared as advocate at every level, including the UK Supreme Court.

Goldsmith said: ‘Sophie and I have enjoyed many successful campaigns and I will of course miss her presence in the team. She is an outstanding litigator and advocate and has been a major contributor to the successes of the London litigation practice. Latham & Watkins are very fortunate to have her.’

Lamb has represented the likes of South Korea, energy major Exxon Mobil, car maker Daewoo and Russia’s largest mobile operator Mobile TeleSystems in high-stakes disputes.